TOKYO -- Tokyo stocks fell in morning trade on Friday, following the broad sell-off in the European and the U.S. markets overnight, as major central banks tightened monetary policy.

The Nikkei Stock Average plummeted more than 700 points from the previous day's close, down nearly 2.7%, at one point. Major stocks, including Toyota Motor and SoftBank Group, are trading lower.

South Korea's benchmark KOSPI index also dropped more than 2% at one point.

On Wednesday, European central banks raised interest rates, following the Federal Reserve's 75 basis point hike aimed at staving off rising inflation in the U.S.

The Bank of England also decided to raise interest rates for the fifth consecutive meeting, while the Swiss National Bank raised its policy rate for the first time in 15 years, to minus 0.25% from minus 0.75%.

Investors are factoring in the risk of the global economy falling into recession, leading to a sell-off on the European and U.S. markets. The Dow Jones Industrial Average closed at 29927.07, down 2% from the previous day, falling below the 30,000 mark for the first time since January 2021.

The Bank of Japan, which has maintained its ultraloose monetary policy, will announce in the afternoon the results of its two-day monetary policy that ends on Friday.

Ahead of the meeting, the market yield for the 10-year Japanese government bond climbed to 0.265%, above the cap of around 0.25% under the central bank's yield-curve control strategy, as some investors bet on a surprise scaling back of the bank's easy monetary policy.